Chicago's economic future
09/14/2011 10:00 PM
We live in a time of challenge and change. During the last several decades we have been transformed into a “global city” while at the same time population, jobs, and housing stock have declined. We are currently enduring a recession of job losses and government cutbacks.
We have to find a way to turn this around.
Over the last four decades we have lost manufacturing and manufacturing jobs. We partially made up the difference by first a switch to the service economy. Now we are a part of the global economy. We are told that we are the Midwest’s capital of the global economy but it is hard to believe that if you are out of work, haven’t received a raise in five years, or have lost your health insurance.
As a city, we depend partly upon tourism and conventions with 10 million visitors attending our cultural sites, watching our sports teams in our downtown stadiums, and participating in the 20 or so major conventions a year at McCormick Place. Many lesser conventions are held at our downtown hotels and bring in those famous business travelers to spend money here. But tourism is not enough by itself.
We are also part of the global economy that provides business services as lawyers, bankers, accountants, traders on the Chicago Mercantile Exchange, university researchers, and business consultants. But this creates a two-tier or hourglass economy with fairly rich folks at the top and very poor folks at the bottom.
To the surprise of most Chicagoans, the Chicago metropolitan region still has the most manufacturing jobs in the country. We are also quietly gaining the most high-tech jobs from companies like Groupon. Despite this, since the 1970s Chicago has had a net loss of 250,000 manufacturing jobs. As a result, our middle class has shrunk by 14 percent.
In our neighborhoods we have watched too many factories close in our industrial corridors and too few new factories or high tech companies open up shop to make up the difference.
With this new global economy, we face the problem of making sure that its benefits do not create a new richer class and a poorer and more desperate class. Rather, we have to find a way to have a more equal distribution of the wealth.
You must, as I do, know family members and friends who are out of work or in that milder phrase, “under employed.” They don’t know how they will pay the rent or, God forbid, the medical bills if there is a health crisis. We have one of the worst home foreclosure rates in the country — people losing their homes left and right, block by block. Many others who can’t sell their homes because they are worth less than their mortgage.
This economic crisis is worsened because all of our governments have run out of money. The state has an $8 billion deficit, the city must close a $650 million budget gap, and the county $300 million. Schools, the CTA, and the suburban governments are mostly in the same situation. So we will have to raise taxes and cut government jobs and services. Thus, they are cutting thousands of government jobs, throwing more people out of work. They will be able to buy less goods and services from the private sector as well so those companies will layoff more workers.
For us to have a more positive future in this new global economy, we need a vision of a new Chicago. We have to rebuild our economy and promote new businesses. Yet, how do you start new businesses if the banks won’t lend money? How do you pay off your home mortgage or your student loans if you work only part-time for minimum wage?
The new proposed federal stimulus package to encourage businesses to hire more workers, schools to hire more teachers (or not fire them), construction workers to rebuild our infrastructure, and workers and businesses to get a payroll tax break is a beginning. But in the end, if Chicago is to be transformed and fully claim its position in the global, national, and local economy, we will have to do it ourselves.